Moving to a cheaper market. Advices ?

Question

Hello fellow investors.

My market (Hollywood FL, Miami, FL)is way too hot and expensive I'm considering moving to another market that's more linear and less expensive like Birmingham Alabama, Oklahoma city, Oklahoma, Milwaukee, Winconsin.

Have any of you done this successfully or unsuccessfully?

what's the main thing to be aware of?

Any advice about what to do or not to do? What to look for and what to stay away from?

Thanks

Cassi Justiz · Answer

Hey @Carlos Florez,

The market will definitely depend on your goals. I'm based in OKC and we've definitely seen our market get hotter over the last 18 months. You can still get cashflow deals, but the numbers are a little more tight than they were a few years ago when OKC was still "undiscovered."

I generally tell people that if you are looking for nicer turn-key properties on the MLS, plan for about .8-.9% deals for your C class rentals and .6-.8% deals for B class. They will still cashflow well, but it's not 1% rule deals. We used to be able to hit 1% rule deals all day on the MLS, but the prices for those types of homes has gone up significantly over the last 18 months. 1% rule deals now are generally going to need some work. If you are willing to do your own marketing and work directly with sellers, the sky is the limit for the deals.

Manuel Seda · Answer

Hey Carlos, I know your situation and understand it. Miami is an expensive city and South Florida is an expensive marker but there are still opportunities. For example you have parts of Pompano Beach where you can get good deals, Also the whole part of Sunrise, Tamarac, Margate and North Lauderdale specifically there is a lot of opportunity from properties  150K + to less than 300K.

Let me know if you would like to connect and further the conversation.

Ryan Solberg · Answer

@Carlos Florez

I would recommend staying as close to home as possible. Just think when something happens and you have to be there fast. A car ride to Orlando would be much faster than a plane ride. Orlando and the space coast is where i have found investments and reasonable amount of visitors willing to pay rent weather it is the theme park workers or visitors. There is a lot of new affordable cheap housing, I am a real estate broker and mortgage broker so i have a few clients with some pretty good size portfolios of homes/condos in the area.

Wale Lawal · Answer

I think you should keep looking, and don't let the heat in Florida discourage you. There is a higher net migration in warmer climates, and that's a big plus for us investors.

Florida has many cities you can invest in. Let me send you this article as it breaks down the ins-and-out of the market in Florida. Please, keep looking!

https://www.mashvisor.com/blog...

Rob Lee · Answer

Where you invest depends on your goals. If you are a long-term investor looking for appreciation make sure you review the historical sale prices of any property you are considering. There are some geos that have experienced little to no appreciation even though the rest of the country is on fire. The neighborhoods within those states that have seen some appreciation are generally higher-end and more expensive.  Of course, run the numbers using the BP calculator or your own tools.

Carlos Florez · Answer

@Alyssa Dyer thanks for that info, thats really cool to hear other investors are implementing that idea. I think being Free, and living off the cashflow of the investments, and not being tied up at a certain location for a job, and the family willing to move to other cities and states to check out other possible places to live make this possible.

My wife and I are thinking of doing this, we just bought plane tickets, rented car and airbnb to visit another state. After that we want to visit the other states. Thank you for your input.

Alyssa Dyer · Answer

I personally haven't done this. I house hack currently and lease my guest rooms out on Airbnb. I've met 3 or 4 people in the last 6 months who all came to OKC for the same reasons you're voicing. They were from Cali and Denver, but the same story. Anyway several of them told me they booked 2-4 week stays at Airbnbs in couple cities, met people, and "lived" there for a short time before pulling the trigger. I don't know your work or family situation, but I thought it was a pretty cool idea.

The guy I who is a guest now has his investments and he just lives on the road. He door dashes and just drives to a new state when he is ready and stays in Airbnbs. That's pretty extreme but I thought it was fun to hear about!

Marcus Auerbach · Answer

I am an investor since 2008 and also an agent and team owner - natuarally I talk to a lot of investors from out of State of State and here is what I have learned. It only makes sense if you are in a very expensive market like CA or the NE coast and you have a huge economic delta - like earning money in San Francisco and investing in Milwaukee.

For everyone else the overhead burden for doing remote business is too great and more than eats up the benefits. The grass only looks greener, we have a very competitive market and good deals are neither cheap nor easy to get,

Alyssa Dyer · Answer

@Carlos Florez man, that’s awesome. I hope you guys find a place you love.

I started doing the STR thing because I had planned on spending 3 months in Paris and then moving to NYC. With everything with covid I figured I’d just do a STR until I things settled down and I was ready to move. Fast forward a year and a half and not much settling has happened and I kinda fell in love with STR 😂😂. Some of the best stuff in life just happens on accident I guess.

Jeff He · Answer

@Carlos Florez

I currently invest in two states while living in a third. In my opinion, the most important thing is to build out a strong local team (realtor, property manager, maybe contractor depending on your deals). They need to understand the area but also have time for you. The really good ones will understandably not be too hungry for new clients but the ones in the middle is the sweet spot.

I also welcome wholesalers who grew up in the area to help get a sense of what streets are good and up and coming.

If you're comfortable with the idea, you could also work with a syndicatior to get your toes wet in a locale with less capital risk than doing it solo.

Moving to a cheaper market. Advices ?

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